1. The Depression
Hoover and FDR

2. Herbert Hoover
Elected in 1928 primarily because the Republicans were associated with prosperity
Believer in individualism, free enterprise, and laissez-faire

3. Conditions which helped produce or intensify the Depression
Overproduction
Unequal distribution of wealth
Overexpansion of credit
The depressed condition of agriculture
Stock Market speculation: buying on margin
Unwise government policies
High tariff, no curbs on Stock Market

4. Hoover Policies Calls for voluntary cooperation
Asks leading industrialists not to cut pay, production, or workers
Asks labor leaders to discourage demands for strikes and higher pay
Asks governors and mayors to spend more on public works to create jobs
But economy continues to tumble

5. Hoover
Optimistic: “prosperity just around the corner”

6. Agricultural Marketing Act
1929
To help farmers help themselves, largely through producers’ cooperatives
Established Federal Farm Board which had no real power to reduce production.

7. Hawley-Smoot Tariff 1930 Increased prices on foreign-made goods
Intended to increase buying of American-made goods
European countries responded with tariffs on American-made goods.
Not successful.

8. FDR and the New Deal
“I pledge you, I pledge myself, to a new deal for the American people.”
Election of 1932 ushered in an era of a different kind of a politician.
Master politician: intelligent, confident, charming
Master communicator: fireside chats

9. Preparing to Lead
The Cabinet: Frances Perkins was the first woman to hold a Cabinet post (Labor).
The “Brain Trust”: Informal group of advisors consisting of intellectuals, lawyers, and economists
Humanitarian wife Eleanor had a great deal of influence.

10. New Deal in Action RELIEF for those people who were suffering.
RECOVERY for the economy so that it could grow again.
REFORM measures in order to insure against future depressions.

11. Stages of the New Deal
: dealt with relief and recovery; most passed in the “First Hundred Days”
: The “Second New Deal”: focused more on social reform
1936 election: high point of the N.D.
: recession due in part to New Deal cutbacks in spending
1938: N.D. ended to opposition in Congress and WWII

12. New Deal Strategies
Use of commerce and elastic clauses of the Constitution to take direct government action.
Fiscal action to stimulate economy and lower unemployment by lowering taxes and increasing government spending.
Government responsibility for the general welfare of citizens.
Increase regulatory role over banks, businesses, and the stock exchange.
Deficit spending: Keynesian Economics

13. Relief Legislation Emergency Banking Act (1933)
Federal Emergency Relief Act (FERA) (1933)
Public Works Administration (PWA) (1933)
Civilian Conservation Corps (CCC) (1933)
Works Progress Administration (WPA) (1935)

14. Recovery Legislation National Industrial Recovery Act (NIRA) 1933
Home Owners Loan Corporation (HOLC) 1933
Federal Housing Administration (FHA) 1934
First and Second Agricultural Adjustment Acts (AAA) (1933 and 1937)
Tennessee Valley Authority (TVA) (1933)

15. Reform Legislation Glass-Steagall Banking Act (1933): created the FDIC
Securities Exchange Act (1934)
Social Security Act (1935)
National Labor Relations Act (1935): also known as the Wagner Act; collective bargaining
Fair Labor Standards Act (1938) set a minimum wage

16. Reactions to the New Deal
FDR built up a “New Deal coalition”
“Solid Democratic South”
“new immigrant” workers
Big cities
African-Americans
Organized labor
Elderly
Business people
farmers

17. Criticism to the New Deal
Strongest opposition came primarily from Big Business
American Liberty League: attacked FDR for using too much power; free enterprise was being attacked
Dr. Francis Townsend: provide government pensions for the elderly
Father Charles E. Coughlin: blamed business owners, especially Jewish ones, for the economic crisis
Senator Huey Long: income and inheritance taxes on wealthy to give each American a $2500 income, a car, and a college education

18. Supreme Court Reacts to New Deal
NIRA declared unconstitutional in Schecter Poultry Corporation v. United States (1935): law illegally gave power to Congress to regulate intrastate commerce
United States v. Butler (1936) ruled that AAA was unconstitutional on grounds that agriculture was a local matter

19. FDR Reacts to New Deal
“Court-Packing”: FDR asked Congress to increase the number of judges from 9 to 15
Aimed at making the S.C. approve the N.D.

20. Andrew Mellon Secretary of the Treasury
Believed course of depression had to be run
Depression a good thing because values would be adjusted, people will work harder